In this article, Szasz's analysis of ‘crazy talk’ is considered in the context of his wider critique of psychiatric theory. We argue that Szasz has performed an important service by drawing attention to psychiatric prejudice regarding the causes of abnormal behaviour, and by pointing to the role of values in psychiatric decision making. However, Szasz may be criticized for his oversimple analysis of the concept of ‘illness’ and for his failure to recognize that values are central to all clinical decision making, including the diagnosis of physical illness. In the light of these criticisms we identify important weaknesses in his arguments about the incoherent speech of psychiatric p